The Colts named Bruce Arians offensive coordinator earlier this week.
This past season, San Diego's defense ranked 22nd in the league in points allowed (23.6) and 16th in yards allowed (346.6).
"I met with Greg yesterday and today with Coach (Pagano). I really feel good about him being a part of this," said general manager Ryan Grigson. "(He is) a great fit. He's versatile within the scheme, 3-4, 4-3. It's part of the philosophy of not trying to put a square peg into a round hole. He lines right up with that. He's a football guy, passionate, fire in his eyes. You know when you sit with him for two seconds he���s an intense football coach. He's ready to come in here and do some great things with us."
Manusky started his coaching career as linebackers coach with the Washington Redskins in 2001, then joined San Diego in the same role from 2002-06.
The 45-year-old Manusky was a linebacker and a standout special teams performer during his 12-year playing career with Washington (1988-90), Minnesota (1991-93) and Kansas City (1994-99).
Also on Thursday, Grigson named Roy Anderson secondary/safeties coach and Marwan Maalouf special teams coach.